Broadcasters And FCC Debate Extra Spectrum

Over the past month, I've re-read a number of 2009 news articles, both at StreamingMedia.com and other technology websites, in preparation for year-in-review articles for the 2010 Streaming Media Industry Sourcebook.

Specifically, I've been looking back at both mobile and media and entertainment articles, comparing predictions from the 2009 Futurewatch columns—where we writers projected our vision of the industry's growth from January to December 2009—and today's 20/20 vision of the 2009 year.

For the 2010 edition, which will be published in February, I've found a few trends worth writing about, including one called the third wave that I want to share as bit of a teaser here.

I've written briefly about the third wave at StreamingMedia.com and also on my workflowed.com blog. 2009 was the year that large armies—from broadcasters and MSOs to telcos and wireless providers—began to stake claims to various pieces of spectrum. The battles are both concerted and concentrated, and the outcomes of the 2009-2010 maneuvers will have decades-long impact on streaming media's landscape.

One area that is particularly contentious across all four of these armies is the "extra" spectrum used by over-the-air (OTA) broadcasters.

When the United States completed its transition to digital television in mid 2009, after several years of planning—and a few months of delays—the concept of over-the-air high-definition television appeared, at best, a money-losing proposition in most parts of the country.

After all, the general consensus appeared to be that most television viewers in urban areas would already have cable, while those in rural areas would not be upgrading to HDTV digital sets.

In addition, a number of OTA broadcasters, affiliates of the big three broadcast networks as well as public broadcasting stations, have used their OTA spectrum to show multiple standard definition channels: At least three SD channels can be multiplexed within the 19.2Mbps bandwidth of a single HD OTA broadcast frequency, offering the potential for additional advertising revenues or alternate programming.

This last point has attracted the attention of wireless mobile phone providers, who are scrambling to cope with the growing data requirements of consumers who are gorging on unlimited bandwidth plans. The wireless service providers, and their telco sister organizations, contend that OTA broadcasts should all revert back to SD-only transmissions, freeing up at least 2/3 of the current broadcast spectrum.

Not so fast say the broadcasters, backed by the National Association of Broadcasters (NAB), who say the spectrum is not for sale.

"My members believe strongly that the business value proposition of over-the-air television far exceeds what would be a one-time snapshot value," said David Donovan, President of MSTV, a trade group comprised of OTA broadcasters.

Shortly after the Advanced Television Systems Committee (ATSC) announced its members had approved a mobile digital television (DTV) standard, known as A/153, which we covered in a recent article, the fight for spectrum ratcheted up a notch to a full-blown debate in front of the Federal Communications Commission.

The debate has drawn at least one MSO—Comcast—into the mix. On December 3, 2009, Comcast and General Electric announced a definitive agreement (pending regulatory approval, of course) to transfer a 51% controlling stake in NBC Universal from GE to Comcast, the country's largest cable provider.

Aggregating NBC, the broadcast network, along with local TV stations and cable channels, Comcast finds itself in a balancing act, pledging support for broadcast TV and affiliates at a time when some NAB members and OTA broadcasters are advocating that consumers drop cable.

Comcast says it will support broadcast TV, and also hopes to see its cable programming assets benefit as a result.

"We intend to preserve and enrich the output of local news, local public affairs and other public interest programming on NBC [affiliate] stations," the company stated in a letter to federal regulators. Comcast also laid out a plan, whereby they would strive to boost NBC's ratings while also retaining its affiliate stations.

So now that a cable-OTA alliance of sorts has been founded between a cable and a broadcast giant, broadcasters may find themselves holding a few more key flanking positions in their battle against the telecoms and their sister wireless service provider organizations.

It appears a see a three-fold benefit awaits OTA broadcasters, if they can hold on to their spectrum allocations.

First, television stations will move to develop sideband delivery of television content to mobile devices, alleviating the need for excessive bandwidth for streaming content, at least for content that is multicast using A/153 or other emerging multicast standards. The downside to the wireless phone operators, though, is that sideband chips placed in mobile handsets would completely bypass the traditional mobile data network, cutting the wireless provider out of the overall transaction.

Second, beyond just iPhone or other smartphone applications, OTA broadcasters could extend their local news brand as a way to monetize their mobile-phone presence, creating "must carry" legislation or non-legislated, lucrative deals in return for consideration of temporary spectrum allocations. These temporary allocations, which may last for 3-5 years, would allow the wireless industry to bring its own data networks up to 4G data capacities, at which time the temporary data bottleneck will be overcome.

Third, Rupert Murdoch's recent testimony at a Federal Trade Commission meeting caught the attention of the media and entertainment space, when Murdoch declared that the future of his newspaper and television empire would rest use a portion of the recently freed-up broadcast spectrum to deliver TV—and enhanced news—to his audience.

In the end, the idea of selling off a portion of spectrum for cash to enable the expansion of wireless broadband holds little appeal for broadcasters, but their lack of interest doesn't mean the spectrum fight won't continue well into 2010.

Within the last day, the NAB has already pegged a key adviser to the FCC as a critic of broadcast television, stating that his hiring "could be a sign that the agency is really on the mistaken path of trying to over-regulate broadcast TV out of business." The NAB SmartBrief quoted a TVNewsCheck analyst, Harry Jessell, in its fight against the spectrum sale.

"Broadcasting remains the only medium able to reach every TV set in every home," wrote Jessell. "That fact not only makes it vital in times of emergencies, but it also gives stations the marketplace edge they need to continue to put reporters in the field and newscasts on the air."

Keep a close eye on this battle as we enter 2010, and watch for an article in the Streaming Media Industry Sourcebook that uses Sling Media as an example of another technology company caught in a skirmish between satellite and cable service providers.